In the news for all the wrong reasons…
More energy supply company controversy hit the headlines over the Easter weekend, this time however the focus was on a different sort of ‘victim’.
Small businesses and charities were the ones to allegedly suffer at the underhand tactics of a household name energy supplier.
The Daily Mail broke the story, where an ex-employee of British Gas Business (BGB) had alleged that a company endorsed policy was in place for staff to target small businesses, including charities, and place them on the most expensive tariffs available.
Whilst such approaches are not uncommon, the apparent endorsement of the activities by the company itself drew strong criticism. It was alleged that rather than over zealous employees adopting such a strategy it was the business itself who fomented and encouraged the sales tactics through a payment structure that enabled employees to potentially treble their salaries.
The size of the premium also caused alarm with the “5p notch-up” on a business customer’s rates being the equivalent of a 60% increase on the basic price offered by BGB and even higher than that available in the open market.
The Daily Mail reported the whistle-blower as saying:
“People were desperate to make the salaries they had been promised, so everyone inflated the prices,
“Scouts was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up.”
In response a BGB spokesperson said:
“British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers.
“We also reject any suggestion that business contracts have been negotiated inappropriately in our business division, British Gas Business.
“This is a highly regulated and competitive market, and every part of the sales negotiation process for business customers is closely monitored. The contract is always finalised with the clear and explicit agreement of the customer.
“We take very seriously any concerns raised by employees or customers, and our processes, as well as sales agents’ terms, are regularly reviewed to ensure they are fair and appropriate.”
Such a strong denial of the apparent activities raised eyebrows, coming shortly after BGB had been fined £5.6m for long term, consistent breaches of the industry codes in which they were found to have treated customers unfairly in contravention of market rules.
For their part, and after a tardy response to BGBs previous contraventions of the rules (when it took Ofgem 5 years to take action and further two to find guilt and fine the company) Ofgem have committed to take “firm action” if it found that once again BGB had not been “honest and transparent” with its customers.
The sheer cynicism of the alleged tactics was underpinned when the whistle-blower said that BGB would target smaller businesses and charities as they had “fewer resources to research the best deal” and therefore tended to “fall for the tactics more easily” than big business would.
The whistle-blower highlighted the heavy incentives on offer from BGB that allegedly encouraged a rip-off culture.
According to the whistle-blower, a standard contract attracted a commission payment to the sales person of between £4 and £37 and anything up to and exceeding £400 if they managed to ‘secure’ a customer on a more expensive deal.
The whistle-blower told the Daily Mail:
“Some people were quite proud about notching up the unit rates,
“I felt guilty. I didn’t do it that often.
“But there were plenty of people there who had no guilt whatsoever.
“They were doing it for the big bucks because they were greedy.”
The whistle-blower even alleged that the words “Volume to Value” were prominent on the walls of BGB’s Leicester call centre in order to reinforce the policy with staff to get customers paying more rather than simply getting more customers.
Amazingly, the whistle-blower claims the awareness of this shocking strategy went right to the top of BGB with former British Gas MD, Phil Bentley, allegedly claiming that he was comfortable with the approach as the customers would eventually benefit from rip-off deals because their rates were fixed and energy prices would get even higher still over time.
Mr Bentley has now left the company and MD of BGB Stephen Beynon, said in response:
“We strongly refute any suggestion that business contracts have been negotiated inappropriately. This is a highly regulated market, and every part of the sales negotiation process is closely monitored.
“Sales agents do receive commission, but we are reducing its importance. We’re leading the way in addressing the variability in price that customers face in this market, and we’ll continue to do so.
“We take very seriously any concerns raised by employees or customers, and our processes, as well as sales agents’ terms, are regularly reviewed to ensure they are fair and appropriate”
Perhaps the worst part of this sorry saga is that it is not a surprise, despite the denials, we regularly receive pleas for help from customers who have been caught out in these ways, and by no means is this limited to BGB.
Indeed it is an issue across the business energy market when energy suppliers and unscrupulous TPIs hoodwink hard pressed, time short businesses into poor value and sometimes fundamentally damaging deals.
As ever our advice is whether you are a one-man band or a multi-national it is, contrary to the claims otherwise, not difficult to research a deal as you simply need to make a call to Business Juice and we can tell you whether you are getting a good deal or not.
You don’t even need to use our service, if you’ve had an offer and don’t know whether it’s a market leading one, we’ll be happy to tell you, and if we can’t improve on that deal we’ll make sure you know it’s a deal you should be striking.